Abstract

This study examines the relationship between director remuneration and performance in Malaysia family firms. The proxies of director remuneration include fees, salary, bonuses, and benefits of kin. The proxy for family firm is a dummy variable that is one (1) if the firm is a family firm and zero (0) is a non-family firm. The dependent variable (performance) is measured by ROA and ROE. A panel analysis of 537 firms from 2007 and 2009 finds that the relationship between director remuneration and performance is significantly positive. This suggests that the remuneration driven board motivation to enhance performance. Furthermore, this study does not find evidence the family firm manipulated a power and control for personal wealth.